A lot of investors are freaking out right now from the market drop. Other than the loss of capital, which is very real, the loss of nerve is also due to a misunderstanding of what they have invested in.
There’s this drama happening in investor’s mind that investing is a game of betting against the market. If I lose my capital, I’ve lost my bet. Only if I make money more than FD, I’ve won my bet.
The market is made up of so many investors. Betting against the market is an extremely difficult task, subject to so many people’s feelings and emotions.
I keep reminding people that investing is a participation in a company’s profits. It is subject to population growth and inflation. For population growth, it happened 18 years ago. It is already happened, people are just now coming out to buy their houses, cars, phones, motorbikes, etc. This is what we are betting on.
When we bet on technology and trends, there is also no guarantee what happened before will happen again. We also cannot be sure we are too early, too late or just right. Did you got a Facebook or a Friendster? Did you got a Telephone or a Telegram? Did you bet on a possibility or a probability.